Leadership lessons from Co-op bank, and cities of Toronto and San Diego

Two leaders resign, another clings on to reduced powers. All reveal serious lapses in leadership behaviour and lack of integrity.

In the US, the recent guilty plea by former San Diego Mayor Bob Filner to false imprisonment and battery charges is hardly an aberration.

Other ethical leadership failures include former senator and vice presidential nominees, such as John Edwards, ex-New York Governor Eliot Spitzer, former Congressman Anthony Weiner, and presidential candidate Herman Cain. 1

In the UK the situation of ethical leadership lapses is hardly any better. Crawley Borough Council’s leader Bob Lanzer stepped down earlier this year after being warned by police over sexual harassment claims made by a fellow councillor.

And a leader of the probation officer’s trade union resigned after being charged with assaulting a train station manager. Though cleared in court she had already stood down as co-chair of National Association of Probation Officers representing 9,000 probation and family court staff in England and Wales.

Three lessons or principles from these diverse events can be drawn for any leader wanting to retain followers and demonstrate ethical credentials.

LESSON No 1 is integrity matters—it’s essential to lead by example. If your behaviour is dreadful then people will neither admire nor or support you. As a leader, without their commitment you are dead in the water.

LESSON No 2 is the absolute importance of setting the right tone for your organisation. Because ethics in business seems so tricky leaders often puzzle over how to do this and fail along the way.

Setting the tone means not just talking often about the need to run a responsible organisation. It demands that as a leader you act that way too, ensuring your personal performance matches your words.

Finally, LESSON No 3 is ethical leaders are strongly values-driven. That is, important ethical principles such as fairness, trust, and respect clearly guide how they behave day-to-day.

Fail on any of these principles and you’re likely to face escalating pressure to quit.

For example, Bob Diamond resigned as leader of Barclays in the UK over the Libor rate-fixing scandal. Whatever his personal money making talents, as a leader he was manifestly poor at setting the right tone for his organisation.

In resigning, Diamond notably chose to blame not the unethical behaviour of his organisation but the

external pressure’ that had built up on Barclays in recent days.

This included MPs calling for his resignation, and a government announcing an inquiry into the affair. 2

In the corporate world, Robert Eckert, CEO of toy manufacturer Mattel from 2000 to 2011, showed how ethical leadership is meant to work. He pulled his company through a public relations crisis in 2008 by personally taking responsibility after news broke of lead paint and design flaws at the company’s factory in China.

The company recalled some 18 million toys from stores and Eckert personally fielded calls from the media. His claim of culpability and commitment to stewarding Mattel through the crisis was a key factor in helping the company survive its precarious situation, cementing his reputation as an effective leader.

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